Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Will a pension received under subsection 11(2) of the Royal Canadian Mounted Police Superannuation Act ("RCMPSA") be non-taxable if the pensioner also receives a pension under subsection 32(1) of the RCMPSA?
Position: No.
Reasons:
Paragraph 81(1)(i) of the Act only exempts benefits paid under section 32 or 33 of the RCMPSA. Benefits payable under other sections of the RCMPSA are taxable under paragraph 56(1)(a) of the Act.
XXXXXXXXXX 2000-004844
G. Kauppinen
(613) 957-8971
February 12, 2001
Dear XXXXXXXXXX:
Re: Taxability of Pension Income
This is in reply to your letters dated September 18 and November 12, 2000, wherein you requested our opinion as to the tax status of your R.C.M.P. pension.
Specifically, you have provided the following details with respect to your situation:
1. You were employed by the Royal Canadian Mounted Police Force (the "Force") from XXXXXXXXXX, inclusive.
2. As a result of injuries sustained on duty you were retired from the Force on XXXXXXXXXX and, pursuant to paragraph 11(2)(b) of Part I of the Royal Canadian Mounted Police Superannuation Act ("RCMPSA"), you were entitled to an immediate pension (the "regular pension").
3. In addition to your regular pension, the Canadian Pension Commission certified your disability as having arose out of or directly connected with your service in the Force and awarded you a further pension (the "disability pension") pursuant to subsection 32(1) of Part II of the RCMPSA and subsection 21(2) of the Pension Act.
You state that you believe that because you were entitled to an immediate regular pension for medical reasons and, because you were granted an additional (disability) pension pursuant to subsection 32(1) of the RCMPSA, both the regular pension and the disability pension should be exempt from income tax pursuant to paragraph 81(1)(i) of the Income Tax Act ("Act").
We do not concur with your opinion. Paragraph 81(1)(i) of the Act clearly states that pension payments received under section 32 or 33 of the RCMPSA in respect of an injury, disability or death shall not be included in computing the income of a taxpayer. However, paragraph 81(1)(i) of the Act does not exclude from the taxpayer's income pension benefits paid under the RCMPSA other than under section 32 or 33.
In Claude Dandurand v. Her Majesty the Queen, 98 DTC 3375, the Court stated that a pension paid under paragraph 10(2)(b) of the RCMPSA is not exempt under paragraph 81(1)(i) of the Act. It was also stated that benefits under 32 and 33 of the RCMPSA are completely separate benefits from long service pensions paid pursuant to paragraph 10(2)(b) of the RCMPSA. Since both paragraph 10(2)(b) and paragraph 11(2)(b) are contained in Part I of the RCMPSA ("Service Benefits") and sections 32 and 33 are contained in Part II of the RCMPSA ("Benefits In Respect of Injury or Death on Service"), in our view the Court's conclusions are also applicable to your particular scenario.
We trust our comments will be of assistance to you.
Yours truly,
Roberta Albert, C.A.
for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2001
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2001
Email this Content